Perhaps the most obvious benefits of exporting involves the potential to grow your business and expand your market. This provides for higher sales volume, profit potential, and reduced risk.
Economies of Scale:
Exports help put idle production capacity to work. Selling more products without increasing total costs results in lower per-unit costs - which represents a more productive overall operation. These lower unit costs also make a product more competitive in the local marketplace and contribute to the firm's overall profitability.
Extend a Product Life-cycle;
A product that may be nearing the end of its life-cycle in the UK may still see demand in Asia or the Middle East. By exporting, you can extend the life-cycle of a product. Or, by the licensing the technology to an overseas producer, a company can continue to generate a revenue royalty stream from the product through off-shore production.
Seasonal Products Potential:
Any company that produces or sells seasonal products such as ski equipment, fruits, or suntan lotion should keep in mind that there are 2 summer sand 2 winters. This offers companies the opportunity to balance seasonal fluctuations in demand and achieve a longer and more stable sales pattern. Likewise, exporting can increase the sales potential for these goods and reduce risk.
Exporting allows firms to diversify their business risk across several markets and reduce their dependency on a single market. This protects them from effects of a downturn or increased competition in the local market.
New Ideas and technology:
Entering foreign markets and operating internationally broadens horizons for a firm by exposing them to new technologies, ideas, production methods, marketing techniques and management methods.